South Korea. [Retirement Pension Investment Strategy] ① “During Booms, Focus on Indexes… Systematic Investing Is Key to Beating Volatility”

Last year, for the first time ever, the accumulated amount of retirement pension funds in Korea surpassed 500 trillion won, illustrating the continuous growth of the domestic retirement pension market. In addition, the Korean stock market has been experiencing a record-breaking bull run, and the domestic exchange-traded fund (ETF) market has also expanded to 500 trillion won, leading to greater public interest in financial investment than ever before. However, despite this rapid growth, the polarization of returns among retirement pension subscribers is intensifying, making it urgent to improve retirement pension yields. According to the “2025 Korea Retirement Pension Investment White Paper” published by the Financial Supervisory Service and the Ministry of Employment and Labor, half of retirement pension subscribers achieved annual returns in the 2% range. While the top 10% of subscribers earned an average return of 19.5%, the bottom 10% saw a return of just 0.5%, creating a roughly 40-fold gap between the top and bottom deciles.

Retirement pension experts unanimously agree that now is the time for subscribers to redefine their investment principles to boost returns. They emphasize that, as retirement pensions serve as assets for old age, prudent investing is crucial, highlighting the importance of asset allocation and risk management for improving yields.

According to interviews conducted by The Asia Business Daily with executives in charge of pension operations at seven local securities firms—Mirae Asset, Korea Investment & Securities, Samsung Securities, KB Securities, NH Investment & Securities, Shinhan Investment, and Kiwoom Securities—the key strategies they proposed for pension investing were asset allocation and systematic, regular investment.

Jung Hyoyoung, Head of the Retirement Pension Consulting Division at Mirae Asset Securities, explained, “Retirement pensions are strictly ‘assets for old age,’ so they should not be approached with betting strategies. Asset composition must take into account your current position and length of employment at your workplace.”

Pyoh Youngdae, Executive Director at Kiwoom Securities, also noted, “Retirement pensions should be recognized as a long-term investment spanning several decades rather than a vehicle for short-term trading. In markets where expectations for index growth are high, it is especially important to adhere to the principles of diversification and systematic, regular investment rather than making excessive concentrated investments.”

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